Russians are very concerned about housing, and the availability of affordable mortgage loans during these tough times, and the Russian government is quick to help. The government has allocated RUB600bn to provide subsidized mortgages to young families, aiming to also revitalise the construction sector by giving young homeowners new opportunities.
According to the Minister of the Construction Industry, Mikhail Men, the goal is to see the average mortgage rate (already below 10%) drop to 6% by the end of the subsidy program.
Bne Intelli news reports that:
The plan is to offer this money to commercial banks willing to sell mortgages at below-market-price interest rates. Those banks will be then financially compensated from the federal budget.
These discounted mortgages will only be available for financing apartments in new housing projects. They will also be available to young families interested in refinancing old debts.
According to the Agency for Housing Mortgage Lending, more than 600,000 families across Russia will be eligible to take advantage of the governmental initiative, which could in turn create a demand for 13mn square metres of housing. This will give a further impetus for the growth of the Russian mortgage market.
Their report also contains more financial analysis for those interested, as well as charts demonstrating the trend.
The report continues to say that due to the falling rates, the Russian construction industry may be revitalized by as early as the end of 2018:
Some Russian experts argue that the construction sector will come out of the crisis mode already in this year. According to the recent study conducted by the Russian Higher School of Economics, 2018 will see a growth of the index of entrepreneurial confidence in the construction sector. The authors of the study titled “The key results of construction companies in the 4th quarter of 2017” make the claim that the Russian construction sector will be out of crisis already in the second quarter of 2018.
This represents an investment in the most important resource in the world – human resources. Seeing Russia take such constructive means to help young homeowners is another reminder that Russia is not only surviving the sanctions, she is thriving in spite of them.